Australia's prime minister paid her respects yesterday to the 202 people who died a decade ago in the Bali nightclub bombings, visiting a commemorative stone monument on the resort island.

"This has been a very emotional 24 hours in Bali," Prime Minister Julia Gillard said after visiting the monument, which stands across the old Sari Club that Islamists attacked, together with Paddy's Bar, on October 12, 2002, bringing carnage to Kuta's party strip.

"This is time for us to mark a nation-changing event," she said.

Friends and families of the dead - many from Australia, which lost 88 citizens - have for the past week left tokens of their grief at the monument, with many breaking down in tears as others looked for closure to an event that changed their lives.

Gillard arrived in Indonesia on Thursday night despite police declaring their highest security alert over an apparent terror threat to Friday's 10-year anniversary ceremony, which was attended by hundreds of families.

Police moved to reassure mourners hours before the ceremony, saying the threat was "not significant".

Gillard praised Indonesia for its crackdown on terrorism, which has crippled the Jemaah Islamiah network behind the bombings and several other deadly attacks.

"This terror network has been held to account. People have been prosecuted and [the network] has been dismantled," Gillard said.

This article appeared in the South China Morning Post print edition as Gillard pays respects at Bali blast site